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Friday, July 31

31st Jul - Low Q2 wage growth kills inflation outlook


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Mankiw and Conventional Wisdom on EuropeJohn Cochrane
I am a big euro fan. This seems a good moment to explain why I don't accept this conventional view, despite its authority from Milton Friedman to Marty Feldstein and Greg Mankiw and even to Paul Krugman.

Matt O’Brien: Italy is the most likely country to leave the euroWaPo

I's the Euro, StupidBB
Events in the debt crisis could be displacing domestic worries when it comes to citizens' perception of the European Union

Ann Pettifor: The Euro, Like The Gold Standard, Is Doomed To FailSocial Europe
The euro not only replicated key elements of the gold standard – but went much further: European currencies were simply abolished. States lost control over both their currency and their central bank. Parallels with the operation of the gold standard explain why, like the gold standard, the euro will fail.

In defence of the (conflicted) ECBFrances Coppola
It is the conflict of interest between ECB-as-creditor and ECB-as-liquidity-provider that makes the ECB ineffective as a lender of last resort.

Could the Greek Government Collapse this Weekend? – Marc Chandler
Lee Jones: Why Syriza Failed – The Current Moment
Tsipras Survives for Now as Party Rebels Blast Greece Rescue – BB
Rajoy Aims to Sway Spanish Voters With Pre-Election Handout – BB

Euro zone inflation stable at 0.2 percent, still far off ECB target – Reuters
Euro-Area Inflation Remains at 0.2% as Core Rate Picks Up – BB
Euro area: Core inflation showing signs of life – Nordea
Euro area: Core inflation surprises on the upside again – Danske Bank
Italy Youth Unemployment Hits Record High 44.2% - ZH

U.S. employment costs post smallest gain on record in second-quarter - Reuters
Quarterly Increase in U.S. Worker Pay Smallest on Record – BB
Earnings Shocker: Quarterly Increase In Wages Is Smallest On Record – ZH
Worst Wage Growth In History Sparks Bond & Stock Buying Frenzy – ZH
Is it time for the Fed to cut rates? – Scott Sumner

Chicago PMI Jumps To 6-Month Highs As UMich Consumer "Hope" Tumbles To 2015 Lows – ZH
Chicago PMI increases, Final July Consumer Sentiment at 93.1 – Bill McBride
U.S. consumer sentiment slips in July – Reuters

GDP Report – Tim Duy
Q2 GDP: Investment – Bill McBride

Trade Like A Market Wizard - An Interview With Mark Andrew RitchieZH

The bloodied emerging markets look like a buying opportunityTF
The negative developments in the emerging market asset prices have received plenty of press recently. Few have noticed that for the past five years EM-equity indices have range-traded on USD-basis, and are now at the bottom of the range. A tight stop and a good profit target within a six month-horizon suggest a tempting trade opportunity.

Daily Central BanksWSJ
Hilsenrath’s Take: GDP Data Support a Soon-and-Slow Rate Hike Strategy * Modest Growth in U.S. Economy * The Expansion Just Got Weaker * Dallas Fed Struggles to Fill Fisher’s Shoes * Eurozone Inflation Subdued as Unemployment Rises

Morning MoneyBeat AsiaWSJ
U.S. Stocks Flat on Rather Mixed GDP Report

Morning MoneyBeat EuropeWSJ
Stocks Edge Higher, Earnings in Focus

Morning MoneyBeat USWSJ
Dog Days of August Could Extend Tight Trading

Danske DailyDanske Bank

Euro rates updateNordea

Greece back in headlines; curve flattening; stronger USD; stocks little changed * All eyes on the US employment cost index today * Both the US and EUR curve flattened, but for different reasons * US and EUR data keeps pushing the EUR/USD lower

Morning MarketsTF
Euro/dollar may have been looking down the barrel of a run below 1.0900 in the late European session yesterday, but a general risk-off sentiment during an edgy Asian session has the key pair heading back and above 1.0950.

Daily FX CommentMarc Chandler
8 Things to Know Before the Weekend

Daily ShotTF
The recovery in inflation in the Eurozone seems to be stalling in spite of the aggressive quantitative easing efforts by the European Central Bank. German and Spanish CPI is trending lower, and bund yields are falling again.

Daily Press SummaryOpen Europe
Schäuble’s proposals to restructure Commission receive mixed response in Germany * IMF steps back from participating in third Greek bailout unless significant debt relief agreed * Wolhgemuth: The ECB’s ‘money for free’ policy will only undermine structural reform in the Eurozone * Süddeutsche: “The Sympathetic Mr Juncker” too soft on debt and deficits * Süddeutsche: German influence within the Commission on the rise * Germany needs up to half a million immigrants a year to deal with declining population * Handelsblatt: Sanctions on Russia are full of holes and hurting German business * Russia continues to probe NATO airspace

Brussels Playbook Politico
Calais chaos continues — Royal soap opera — EU vs Hollywood

Chinese Stocks Drop, End Worst Month Since August 2009; US Equity Futures Flat


From the FloorTF
It's official! The chances of a US interest rate hike in September is a coin-toss.The market is split into two halves after last nights US Q2 GDP release which encouraged the doves with its low headline number (2.3% vs 2.6% expected) but also gave succor to the hawks who zoned in on an unexpectedly strong inflation component.

USA:n toisen neljänneksen BKT-kasvu kiihtyi | IMF ilmoitti aikovansa jäädä pois Kreikan tukipaketista | USA:sta saadaan työvoiman kustannusindeksi